Let's Create the Green UBI: Using a Carbon Tax to Support Low Income Oregonians

If Democrats consider the concerns of the Republicans instead of creating the policy without them, they’re much more likely to actually create successful policy

We’re done debating whether our climate is changing. The frequent summer heat waves and worsening air quality alone are undeniable evidence of that. 

Yet, despite the direct impact that climate change is having on our lives, around 17 percent of Oregonians question the need to move away from fossil fuels. In some cases, there’s also a financial reason for a fear of climate action. Lower and middle class Oregonians tend to be the most reliant on fossil fuel use and the jobs, cheap gas, and low energy costs that come along with it. That’s why transitioning from fossil fuels could harm these groups, if Oregon doesn’t play its cards right--for instance, by making transportation temporarily more expensive and not helping Oregonians adjust to these costs. In this piece, I’ll describe the concerns that some Oregonians share about climate change policy, and propose solutions that would resolve them.

One concern among Oregonians is that the boldest solutions to climate change bring a lot of uncertainty and are, therefore, quite controversial. Perhaps the most controversial climate change solution is to charge companies a carbon tax. That’s because a carbon tax, which is an added cost that companies pay for emitting carbon, would likely increase the cost of energy in Oregon. The companies that rely on carbon to produce energy would probably hike up their prices in order to adjust for the higher cost of production. In other words, a carbon tax often gets passed onto the consumer in the form of higher prices. Ending fossil fuel subsidies would have a similar effect. By a 2017 estimate, the fossil fuel industry received $5.2 trillion in subsidies. Without those subsidies, companies are likely to charge the consumer more if it becomes more expensive to produce their product.

Oregonians that are well-off wouldn’t necessarily have to worry about this carbon tax since they can stomach the price increase or even adopt greener alternatives like electric vehicles. But on the other end, the middle class and especially the lower class tend to be the least capable of transitioning to renewable options. Low-income households can’t afford to pay a tax for gas, heating, and electricity when they already earn so little income.

However, without a carbon tax or an equivalent large push away from fossil fuels, Oregon effectively encourages companies to pollute and exploit the environment for profit. The whole point of a carbon tax is to incentivize companies to cut carbon from their business model and operate in a more environmentally-friendly way. There must be a way to use this incentive without hiking up the cost of energy for those that can’t afford it. Thankfully, there are options.

One of my favorite solutions is to use the carbon tax revenue to fund a basic income for the families that’d be the most impacted by the carbon tax. The revenue generated by the tax would become monthly payments to specific Oregon communities, not too unlike the monthly payments many received in the pandemic. That way the carbon tax would still motivate companies to transition away from fossil fuels, while protecting vulnerable households from fluctuating energy prices. Once businesses begin to use sustainable energy and are no longer charged for a carbon tax, prices will drop back down again. Then, in order to stay competitive, other businesses would likely follow suit to avoid being driven out of business by the competition’s lower prices. As you can see, carbon taxes are a very strong incentive for businesses to eliminate emissions, and would likely just lead to a temporary increase in the price of energy. Paired with something like the proposed basic income idea, a carbon tax could fuel a rapid transition to a cleaner economy, without hindering the economy.

Another concern that some Oregonians have is that the proposed climate change timeline is unrealistic. They argue that we’ll never reach a point-of-no-return where humanity’s course becomes irreversible. In this line of thinking, the advancement of technology will create solutions in the future that will mitigate the effects of climate change, via sea walls, geoengineering, and ideas that are yet to be invented. Those in this camp believe that the economy can naturally transition to renewable energy via the market instead of being rushed into it by the government.

To a certain extent, I think there’s merit to that argument. There is astounding carbon capture technology that can absorb emissions from the atmosphere, and even more inventions to come forth in the coming decades. However, the truth is that we’re already being hammered hard by climate change right now in obvious ways like droughts, frequent forest fires, and more severe hurricanes every year. We can’t afford to wait until this technology is scaled up or invented in the future because we’re already suffering from climate change’s effects today.

It’s important to mitigate climate change’s effects as they come up, but it’s impossible to mitigate all of them. We can’t possibly foresee and mitigate all of the different impacts that climate change will have. That’s why it’s crucial to act where we agree: mitigate the current effects of our warming planet, but also put in place the framework for preventing further warming.

A carbon tax alone isn’t likely to pass in the State Legislature, just look at the recent Republican walkouts when Democrats tried as much. But if Democrats consider the concerns of the Republicans instead of creating the policy without them, they’re much more likely to actually create successful policy, which they can build on later. Let’s make Oregon the first state with a Green UBI. 

Jared is a Politics, Policy, Law and Ethics Major at Willamette University, aspiring to bring Oregon together to achieve more representative elections and a sustainable energy program to brag about.

"Bonneville Dam" by www78 is licensed under CC BY-NC 2.0